According to the president of the Hungarian Trade Union Confederation (MASZSZ), as long as
- the target figures set in the wage agreement are met,
- and the average annual 12% increase will be realised, resulting in a total 40% rise in the minimum wage over the next three years,
- with the minimum wage reaching half the expected regular gross average salary by 2027, in line with the European directive on minimum wages,
there would be no reason for dissatisfaction. On the other hand, Róbert Zlati also reminded that unions initially pushed for a 15% increase in the minimum wage for next year — viewed from this perspective, he said the
The wage agreement was a compromise; no one is completely satisfied – added the Secretary General of the National Association of Entrepreneurs and Employers (VOSZ). László Perlusz believes they pushed the limits, but if the ambitious numbers (GDP growth, average wage growth, inflation, as outlined in the chart) are achieved, the increase in the lowest wages and the costs of addressing wage compression will be manageable.
However, if actual values deviate by more than 1% from the projections, corrections will be needed, as stipulated in the wage agreement, he added.
Compromises in the social contribution tax reduction
According to the agreement,
- for wages that did not reach the minimum wage of the following year in the previous year, the 13% social contribution tax (szocho) will only need to be paid based on the previous year’s minimum wage.
For example, next year, for wages in 2024 that did not reach the 2025 minimum wage (gross HUF 290,800), employers will only need to pay the social contribution tax on the current minimum wage (gross HUF 266,800), and so forth until 2027. Based on our calculations, this szocho discount could result in maximum savings of HUF 3,120 per person per month next year (if the employee earned exactly the minimum wage this year). However, even with this monthly savings of a few thousand forints (HUF 3,120; HUF 4,914; HUF 5,980), employer costs will continue to rise year by year — by HUF 24,000 next year, then by another HUF 40,920, and an additional HUF 50,914 per person per month in subsequent years.
